LOREAL_Registration_Document_2017

L'Oréal’s corporate social, environmental and societal responsibility* THE SHARING BEAUTY WITH ALL PROGRAMME

Key figures 6,400 supplier sites have been subject to social audits since the reporting tool was set up in 2006: 1,231 audits ; were carried out in 2017, making a total of s over 9,400 since 2006; 45% of the audits in 2017 were carried out in Asia; s 66% of supplier sites audited for the first time (initial audits) s presented major instances of non-compliance. During follow-up audits, there were no longer any major non-compliances for 42% of the suppliers who were initially non-compliant; 59% of all of the sites audited presented major non- s compliances in 2017. SHARING AND JOINT DEVELOPMENT WITH SUPPLIERS L’Oréal wants to share, stimulate and jointly develop solutions with its suppliers in order to promote best practices throughout its value chain; these are thus used to inspire and support partners in deploying their own action plans. This support is provided worldwide by: Supplier Days in Europe in 2012 and in the United s States in 2016; Sharing Beauty With All events with suppliers s organised in Asia during the first half of 2017 (China, Indonesia, India and Japan). meeting in the form of a working group, 121 suppliers, EHS operatives and L’Oréal buyers held discussions on the achievement of L’Oréal's plants in the areas of waste reduction, CO 2 emissions and water consumption, together with Solidarity Sourcing initiatives; An online site for suppliers in the process of being s rolled out. Strategic information provided by purchasing, ethics, SWBA or group managers are posted on this site in videos or very hands-on tool kits on CDP Ecovadis or through the Solidarity Sourcing programme and, lastly, e-learning courses on social auditing. The purchasing teams also pass on this information s on a daily basis in their contact with suppliers. A number of suppliers can also testify about their good practices, for example, through the Solidarity Sourcing programme.

Inciting strategic suppliers to reduce their greenhouse gas emissions

L’Oréal has successfully pledged to combat climate change by setting ambitious targets, in particular that of reducing its CO 2 emissions by 60% between 2005 and 2020, for its plants and distribution centres (this target was exceeded in 2017). At the same time, L’Oréal also wants to actively contribute to reducing the greenhouses gases of its supply chain. Approximately 33% of the Group’s carbon footprint results from the activities of its suppliers. This is the reason why L’Oréal has associated its suppliers since 2009 with the process for measurement and reduction of its carbon footprint by encouraging them to work with the CDP, within the framework of the CDP Supply Chain programme. This NGO, of which L’Oréal has been a member since 2003, invites companies to publish their environmental impact and provides them with measurement, evaluation and communication tools. Within the framework of the Sharing Beauty With All programme, participation by L’Oréal’s strategic suppliers in the CDP Supply Chain has now been made compulsory and 94% of the suppliers asked to participate have responded positively. They have been selected in the 6 fields of purchases (raw materials, packaging items, production equipment, subcontracting, POS advertising/promotional items and materials and indirect purchases), all over the world. They are suppliers involved in industries that generate CO 2 , and may be large industrial groups or small and medium-sized businesses. In December 2015 at the time of the COP21, L’Oréal pledged that suppliers representing 80% of direct purchases: will participate in the CDP Supply Chain; s will set targets for reducing their carbon footprint; s will communicate on their action plans to succeed in s reaching this target. As of the end of 2017, the suppliers fulfilling this commitment represent 60% of direct purchases. L’Oréal continues to be recognised by the CDP as one of companies that is the most committed to reducing greenhouse gas emissions. The large number of the Group’s suppliers who are partners of the CDP testifies to this fact. This growing commitment results in particular from the strong commitment of L’Oréal’s Purchasing and Environmental teams who transmit results with comments and opportunities for improvement to the suppliers who participated. CDP Supply chain performance is at the heart of the discussions during the annual business reviews, but also throughout the year. In addition to their participation, L’Oréal pledged to ensure that its suppliers would make progress. In order to achieve this, in 2017, the Purchasing and Environmental teams: organised meetings with subcontracting providers on s climate change and the CDP;

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; Statutory Auditors have expressed a reasonable assurance with regard to this indicator.

REGISTRATION DOCUMENT / L'ORÉAL 2017

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